GAP insurance?

[cllecr]

We purchased a used 2011 Sunseeker 2300 one month ago. The dealership recommended GAP insurance for ~$900 on our $45000 loan (we put $5000 down)... So we went with it. Since then I have been researching and am confused about whether it is a good idea or not. Neither our insurance (state farm) or our lender (Bank of America) offer a similar product so I can't compare prices. We are definitely thinking of paying off this loan early, so that is a consideration. Today is the last day that I could cancel for a full refund... Any advice?

[Magnetic]

On a vehicle that is subject to other crazy drivers day in and day out... maybe. Most RVs/Campers are driven/towed with a much greater sense of caution. $900 is what someone would pay for GAP on a car or truck. It may be a good idea for some, but that rate doesn't reflect the disproportionate level of risk to me.

[travyp]

Here is what you have to look at. Should you get in a crash TODAY, how much is the thing worth for replacement. I did an NADA on it very basic as I don't know your options/motor etc and it retails at $55,000. Your loan is $10,000 less than that so you "should" get full replacement value for it if you get in an accident. Next year what will it be worth? I have no idea. If you are paying it off faster than normal and can stay above the depreciation factor then you are covered and don't need GAP. It is when it depreciates faster than you are paying it off that GAP is needed (IF you get in an accident an total it). It is a game of risk. Do you want the peace of mind for $900 that if it is totaled the loan is paid for or not?

[Herk7769]

Originally Posted by travyp

Here is what you have to look at. Should you get in a crash TODAY, how much is the thing worth for replacement. I did an NADA on it very basic as I don't know your options/motor etc and it retails at $55,000. Your loan is $10,000 less than that so you "should" get full replacement value for it if you get in an accident. Next year what will it be worth? I have no idea. If you are paying it off faster than normal and can stay above the depreciation factor then you are covered and don't need GAP. It is when it depreciates faster than you are paying it off that GAP is needed (IF you get in an accident an total it). It is a game of risk. Do you want the peace of mind for $900 that if it is totaled the loan is paid for or not?

I am with Travis here. Unless you can afford to eat the difference between what the insurance gives you and the loan; gap insurance is well worth the money.

[lbrjet]

You paid retail and would get wholesale if you had a total loss. You can't buy new replacement cost coverage if you purchase used so that doesn't apply. I would personally pocket the 900 bucks and put it aside and apply it to the 'gap' (assuming there is one) in the unlikely event you total the unit in the short term.

[cllecr]

Originally Posted by lbrjet

I would personally pocket the 900 bucks and put it aside and apply it to the 'gap' (assuming there is one) in the unlikely event you total the unit in the short term.

Thank you all so much for giving me different perspectives to consider while I made this last minute decision.

Many things made this a costly bet against ourselves, and a poor value if we intend to stay ahead of the depreciation value or pay off the loan entirely over the short term.

We decided to cancel and hope for the best outcome.